Case 4:18-cv-07229-YGR Document 142 Filed 11/12/20 Page 1 of 9
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`EDWARD G. POPLAWSKI (SBN 113590)
`epoplawski@wsgr.com
`OLIVIA M. KIM (SBN 228382)
`okim@wsgr.com
`TALIN GORDNIA (SBN 274213)
`tgordnia@wsgr.com
`WILSON SONSINI GOODRICH &
`ROSATI
`Professional Corporation
`633 West Fifth Street, Suite 1550
`Los Angeles, CA 90071
`Telephone: (323) 210-2900
`Facsimile: (866) 974-7329
`
`Attorneys for Defendant
`QUALYS INC.
`
`RYAN R. SMITH (SBN 229323)
`rsmith@wsgr.com
`CHRISTOPHER D. MAYS (SBN 266510)
`cmays@wsgr.com
`WILSON SONSINI GOODRICH &
`ROSATI
`Professional Corporation
`650 Page Mill Road
`Palo Alto, CA 94304-1050
`Telephone: (650) 493-9300
`Facsimile: (650) 493-6811
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`
`OAKLAND DIVISION
`
`CASE NO.: 4:18-cv-07229-YGR (TSH)
`
`QUALYS INC.’S REPLY IN
`SUPPORT OF MOTION FOR
`JUDGMENT ON THE PLEADINGS
`(FED. R. CIV. PROC. 12(c))
`
`Judge: Hon. Yvonne Gonzalez
`Rogers
`Date: December 8, 2020
`Time: 2:00pm
`Location: Zoom Teleconference1
`
`)))))))))))))
`
`FINJAN LLC, a Delaware Limited Liability
`Company,
`
`Plaintiff,
`
`v.
`
`QUALYS INC., a Delaware Corporation,
`
`Defendant.
`
`1 Per the Court’s Notice regarding Civil Law and Motion Calendars and its Order at D.I. 48.
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`CASE NO. 4:18-cv-07229-YGR
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`REPLY ISO MOTION FOR JUDGMENT ON THE
`PLEADINGS
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`Case 4:18-cv-07229-YGR Document 142 Filed 11/12/20 Page 2 of 9
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`I.
`
`INTRODUCTION
`This is a far-flung case in which Finjan continues to assert nearly 90 patent claims against
`Qualys, many of which should never have been litigated in the first place. The ’305 Patent is the
`preeminent example of this. The Patent Office has already determined that four claims of the ’305
`Patent (1, 2, 5, and 13) are invalid. Each remaining asserted claim of the ’305 Patent asserted
`against Qualys is either a carbon copy of one of those claims or makes trivial changes that do not
`alter the question of patentability. The Court need not accept Qualys’s word for this; the Patent
`Office’s findings are plain, clear, and consistent. No amount of expert opinion can credibly
`undermine the public record, nor should consideration of that record convert this motion into one
`for summary judgment. Finjan’s Opposition fails to deliver the bottom line: what exactly does
`Finjan think is materially different about the remaining claims of the ’305 Patent? Finjan’s
`inability to answer this question demonstrates why collateral estoppel applies.
`II.
`THE COURT MAY PROPERLY TAKE JUDICIAL NOTICE OF THE PUBLIC
`RECORD AND GRANT QUALYS’S MOTION
`Finjan argues that the Court should deny Qualys’s Request for Judicial Notice and treat
`this as a premature motion for summary judgment.2 D.I. 132 (“Opp.”) at 7. Finjan incorrectly
`posits that a Rule 12(c) motion is inappropriate to assess whether collateral estoppel should apply.
`Multiple courts have addressed invalidity-based collateral estoppel through Rule 12 motions. See,
`e.g., Cisco Sys., Inc. v. Capella Photonics, Inc., No. 20-CV-01858-EMC, 2020 WL 4923697, at
`*6-7 (N.D. Cal. Aug. 21, 2020) (granting motion for judgment on the pleadings after determining
`collateral estoppel of invalidity was “inescapable”); Blair v. Alstom Transportation, Inc., No. 16
`CIV. 3391 (PAE), 2020 WL 4504842, at *6 (S.D.N.Y. Aug. 5, 2020) (granting motion to dismiss
`based on collateral estoppel where “there is no meaningful distinction between this limitation [in
`
`2 Finjan’s Opposition includes an excerpt from a second Reexamination for the ’305 Patent
`brought by third party Sonic Wall. See D.I. 132-2. Finjan appears to argue that the second
`reexamination also renders this motion premature. See Opp. at 3 (referring to the second
`reexamination as being in its “infancy.”). But this second reexamination has already resulted in
`a first office action finding that Claims 6, 9, 11, 12, 17, and 25 of the ’305 Patent are invalid
`based on the same prior art raised in Qualys’s Motion. See D.I. 132-2 at 100 (identifying
`Sandu, Wells, and Freund). If the Court were to accept Finjan’s prematurity argument, then it
`should instead consider staying this entire case until the second reexamination concludes, as
`doing so would almost certainly narrow the scope of the remaining issues for this patent.
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`Case 4:18-cv-07229-YGR Document 142 Filed 11/12/20 Page 3 of 9
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`asserted claim 10] and the cancelled limitations in [invalidated] claims 20 and 22.”); Control v.
`Digital Playground, Inc., No. 12-CV-6781 (RJS), 2016 WL 5793745, at *5 (S.D.N.Y. Sept. 30,
`2016) (Granting Rule 12(c) motion and holding “because the Patents are substantially the same,
`the Court finds that Plaintiff is collaterally estopped from bringing infringement claims on both
`Patents.”).
`Finjan’s argument appears to be premised on its desire to inject expert testimony to attempt
`to cast a shadow of doubt over what is an otherwise clear public record. But Finjan gives the Court
`no reason to believe expert testimony would yield a different result. The public record of the
`Patent Office’s factual determinations regarding invalidity are clear and reached a final judgment.
`While an expert may disagree with that result, such a disagreement is no longer legally relevant
`since the issue has already reached a final judgment in the Patent Office. Finjan gets it wrong by
`arguing that Qualys must essentially re-prove invalidity for collateral estoppel to apply. Also,
`tellingly, Finjan already offered substantial expert opinion on this issue during the ’305 Patent’s
`Reexamination. See D.I. 125-2 at FINJAN-QUALYS 404259-261, 405077-405078. The Patent
`Office considered and rejected that testimony. No amount of additional expert testimony can
`unwind that clock. The issue now is whether the remaining claims exhibit any material differences
`that might mandate a different result. See Ohio Willow Wood Co. v. Alps S., LLC, 735 F.3d 1333,
`1342 (Fed. Cir. 2013) (“If the differences between the unadjudicated patent claims and adjudicated
`patent claims do not materially alter the question of invalidity, collateral estoppel applies.”).
`Finjan further argues that the Court should decline to take judicial notice of disputed facts.
`Opp. at 7. The record is what it is, and the Patent Office’s determinations are what they are. The
`Court can judicially notice this record and those determinations, and Finjan’s disagreement about
`the result does not change anything. Moreover, Finjan itself does not point to any actual disputed
`facts relevant to this issue. For example, Finjan’s Opposition relies on an interrogatory response
`seeking Finjan’s rebuttal contentions to Qualys’s invalidity contentions, not Qualys’s collateral
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`estoppel claims. Id. Finjan bulk-cites to the entirety of this 37-page response without identifying
`a single disputed fact relevant to collateral estoppel. D.I. 132-4 at 10-46. Its arguments lack force.3
`III.
`COLLATERAL ESTOPPEL APPLIES
`Turning to the heart of the matter, Finjan’s Opposition fails to meaningfully dispute the
`key elements of collateral estoppel. Cisco, 2020 WL 4923697 at *3 (“Judgment on the pleadings
`is proper when the moving party clearly establishes on the face of the pleadings that no material
`issue of fact remains to be resolved and that it is entitled to judgment as a matter of law.” (citing
`Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989)).
`Instead, Finjan premises its arguments on incorrect legal standards and legally immaterial facts to
`distract and mislead the Court into believing that it must adjudicate the question of invalidity all
`over again. This is wrong, as explained below.
`A.
`Finjan’s Opposition Repeatedly Applies Incorrect Legal Standards.
`Finjan makes three arguments that fundamentally misunderstand the law of collateral
`estoppel as it relates to this Motion. First, Finjan argues that “the Asserted Claims have never been
`held invalid” and that collateral estoppel cannot apply because the asserted claims here “were not
`challenged” in the ’305 Patent’s reexamination proceedings. Opp. at 8, 12. Second, Finjan argues
`that collateral estoppel cannot apply because “the original examination resulted in the issuance of
`the Asserted Claims and each subsequent examination did not find the Asserted Claims
`unpatentable.” Opp. at 8; see also id. at 11. Finally, Finjan argues that collateral estoppel does
`not apply essentially because Qualys failed to show obviousness through the Federal Circuit’s
`Graham factors. Opp. at 8-10. None of these arguments have any merit.
`Finjan incorrectly argues that there has been no final determination on the merits because
`the specific claims asserted against Qualys have not been successfully challenged in any prior
`proceedings. This is totally irrelevant. Collateral estoppel is assessed on an “issue” basis, meaning
`“the ultimate determination on patent validity itself” and not on a claim-by-claim basis. Roche
`Palo Alto LLC v. Apotex, Inc., 526 F. Supp. 2d 985, 994–95 (N.D. Cal. 2007), aff’d, 531 F.3d 1372
`
`3 Likewise, Finjan does not address its response to Interrogatory No. 10, also attached to its
`Opposition, which does seek Finjan’s collateral estoppel contentions. But Finjan’s response is
`silent on the question of whether any differences are material. See D.I. 132-4 at 6-10.
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`(Fed. Cir. 2008); see also Ohio Willow, 735 F.3d at 1342 (“Our precedent does not limit collateral
`estoppel to patent claims that are identical. Rather, it is the identity of the issues that were litigated
`that determines whether collateral estoppel should apply.”); Soverain Software LLC v. Victoria's
`Secret Direct Brand Mgmt. (“Soverain II”), LLC, 778 F.3d 1311, 1319 (Fed. Cir. 2015) (“Complete
`identity of claims is not required to satisfy the identity-of-issues requirement for claim
`preclusion.”); Intellectual Ventures I, LLC v. Lenovo Grp. Ltd., 370 F. Supp. 3d 251, 256 (D. Mass.
`2019) (“Additionally, for collateral estoppel to apply, the asserted unadjudicated claim need not
`be identical to the adjudicated claim.”). Under controlling Federal Circuit precedent, because there
`has been a determination (backed by a final judgment in which Finjan participated) of invalidity
`with respect to Claims 1, 2, 5, and 13 of the ’305 Patent, the analysis now turns on whether the
`asserted claims not at issue in the ’305 Reexamination (i.e., 6-12, 14, and 17-25) have any material
`differences from the claims invalidated in the ’305 Reexamination (i.e., 1, 2, 5, and 13) that might
`alter that determination. See D.I. 124 at 7; Ohio Willow, 735 F.3d at 1342 (“If the differences
`between the unadjudicated patent claims and adjudicated patent claims do not materially alter the
`question of invalidity, collateral estoppel applies.”); Soverain II, 778 F.3d at 1319–20 (“The
`additional limitation here—transmitting a hypertext statement over the Internet, rather than over a
`generic network—does not materially alter the question of the validity of claim 39 . . . the routine
`incorporation of Internet technology in claim 39 does not change the invalidity analysis.”);
`Chrimar Sys. Inc. v. Ruckus Wireless, Inc., No. 16-CV-00186-SI, 2020 WL 4431787, at *5 (N.D.
`Cal. July 31, 2020). Finjan does not answer this critical question.
`The fact that other proceedings did not invalidate the claims of the ’305 Patent is another
`totally immaterial fact. See Opp. at 3. What matters for collateral estoppel is the proceeding that
`reached a final judgment of invalidity. Anyway, Finjan admits that those proceedings involved
`different theories of invalidity and different prior art combinations. Id.4 Finjan leans heavily on
`the fact that the IPR involving ESET included the Freund reference cited in Qualys’s Motion. But
`Finjan completely misunderstands how Freund relates in a collateral estoppel analysis. Qualys is
`
`4 The IPR proceedings mentioned in Finjan’s Opposition did not involve either the Sandu or
`Wells references that formed the basis of the invalidation of Claims 1, 2, 5, and 13 in the ’305
`Reexamination. See D.I. 132-5 at FINJAN-QUALYS 318376.
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`not asking the Court to adjudicate whether Freund renders any claim obvious. The point is that
`the Patent Office has already made factual findings that the content of Claims 6-12 and 17-24 were
`known in the art. See D.I. 124 at 9-11 (and citations therein). Freund was simply an example the
`Patent Office cited to support those determinations. Those findings are part of the record no matter
`what Finjan’s post-hoc litigation experts may say.
`Moreover, the Final Decision in that IPR confirms Qualys’s point. There, the Patent Office
`once again found that the patentability of Claims 6-12 and 17-24 depends entirely on the
`patentability of Claims 1 and 13. See D.I. 132-5 at 47-48 (“Petitioner’s analysis of the dependent
`claims is thus insufficient for the same reasons as its analysis of the independent claims.”). As
`discussed in the Motion (D.I. 124) at 9-11 and below in Section III.B.2., this is precisely why
`Claims 6-12 and 17-24 cannot stand now that the Patent Office has invalidated Claims 1 and 13.
`The IPR’s Final Written Decision (yet another final judgment in which Finjan was a party) is
`consistent with the Patent Office’s factual findings made during the ’305 application process.5
`Finjan also incorrectly argues that Qualys’s Motion should be denied because Qualys has
`failed to prove the invalidity of the ’305 Patent’s remaining claims. This argument again
`fundamentally misunderstands collateral estoppel. The Patent Office has already entered a
`judgment of invalidity involving the ’305 Patent. Qualys is not asking the Court to undertake
`another such analysis here, nor does it need to. Collateral estoppel requires only that the Court
`assure itself that the remaining claims of the ’305 Patent would not materially alter the Patent
`Office’s invalidity findings. Finjan fails to point to any material differences preventing estoppel.
`B.
`Finjan Fails to Identify Any Material Differences Between Invalidated
`Claims 1, 2, 5, and 13 and Asserted Claims 6-12, 14, and 17-25.
`Finjan’s arguments regarding specific claims (see Opp. at 10-11) fail for much the same
`reasons. Specifically, Finjan fails to address the key inquiry: why, given the public record, any
`such differences should be considered material. See Soverain II, 778 F.3d at 1319 (holding in
`
`5 As another example of why expert testimony is unnecessary on this subject, in the IPR
`proceedings Finjan relied again on Dr. Medvidovic, the same expert it used in the ’305
`Reexamination. See D.I. 132-5 at 8. Dr. Medvidovic is also an expert for Finjan in this
`litigation, and Finjan makes no attempt to explain what Dr. Medvidovic will say about the ’305
`Patent this third time around that he has not said in either prior proceeding.
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`summary judgment context that “because the patentee failed to explain how the additional
`limitation would change an invalidity analysis, the patentee had not met its burden”); Chrimar,
`2020 WL 4431787 at *6 (same).
`1.
`Claims 14, 17, and 25
`
`Finjan suggests (in attorney argument only) that it should not be estopped from proceeding
`with Claims 14, 17, and 25 because Qualys “fails to appreciate the basic inherent differences
`between claims that relate to a security system capable of scanning content within a computer . . .
`and those that are directed to actually performing a method.” Opp. at 10. This argument is flawed
`for several reasons. First, Finjan’s argument contradicts the public record, which demonstrates
`that neither it nor the Patent Office ever considered such a distinction to be material. Indeed, the
`Patent Office invalidated “system” Claims 1, 2, and 5 alongside “method” Claim 13 for the exact
`same reasons. See D.I. 125-2 at FINJAN-QUALYS 404258, 404260, 404262, 405020-037. At
`the same time, Finjan itself argued to the Patent Office that Claim 13 (method) was patentable
`“because of the same reasoning presented with respect to identical claim 1 [system].” Id. at
`405073, 405077 (emphasis added). As this issue reached a final judgment, Finjan has long since
`waived this argument. Second, Claim 25 recites a software-implemented method with the exact
`same steps as Claim 13 (also a method claim). See D.I. 124 at 8-9. Finjan does not explain why
`Claim 25’s method should be treated any differently from Claim 13. Third, Finjan dismisses the
`fact that its own infringement contentions fail to recognize any differences between system or
`method claims. See id. at 9; D.I. 100-11 at 000346, 000347, and 000355-000359; Opp. at 10.6
`2.
`Claims 6-12 and 18-24
`
`Finjan’s arguments regarding Claims 6-12 and 18-24 are similarly meritless. Finjan cites
`several discussions of the Freund reference made during the original prosecution of the ’305
`
`6 Finjan argues that the Court should ignore its infringement contentions because the analyses
`for infringement and invalidity are different. But this fundamentally misunderstands the point.
`Determining the scope of a claim—including what differences may exist between two claims in
`the same patent—is a matter of claim construction that is applied equally to questions of
`infringement and invalidity. Finjan’s failure to treat these claims as containing any material
`differences in its infringement contentions shows it does not consider such differences to exist.
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`Patent’s application. Opp. at 11. As discussed above, however, the Freund reference is incidental
`to the collateral estoppel analysis; what matters are the factual determinations the Patent Office
`rendered, and which now form part of the undeniable public record of this patent. But, in any
`event, none of the cited discussions address the central question of whether the content of Claims
`6-12 and 18-24 were known in the prior art. As such, Finjan’s citations are immaterial and do not
`plausibly call into dispute the Patent Office’s multiple factual determinations on this subject.
`Indeed, Finjan concedes that the Patent Office allowed Claims 6-12 and 18-24 because Finjan
`amended those claims’ respective independent claims (i.e., Claims 1 and 13). Opp. at 11 (“Each
`of the rejections were contested and the independent claims from which these claims depend were
`amended several times to place the claims in condition for allowance.”). That is the point: the
`parties apparently agree that the patentability of Claims 6-12 and 18-24 depend on the patentability
`of Claims 1 and 13. The Patent Office’s invalidation of Claims 1 and 13 brings the whole house
`of cards down through collateral estoppel.
`C.
`Finjan Misapplies the Case Law.
`Finjan also materially misunderstands the relevant authorities. For example, Finjan relies
`extensively on the non-precedential decision in Purdue Pharma L.P. v. Iancu, 767 F. App’x. 918,
`922 (Fed. Cir. 2019). But that case is distinguishable. There, the Federal Circuit expressly held
`that the disputed issue—whether a particular reference qualified as prior art—was never actually
`litigated. Id. (“The issue of Joshi’s priority was not actually litigated in the district court
`proceeding.”). Here, there is no dispute that that issue of the validity of Claims 1, 2, 5, and 13 was
`fully litigated to a final judgment in the reexamination proceedings. See D.I. 124 at 4-5; Opp. at
`2. Finjan once again misunderstands that collateral estoppel does not require the exact same claims
`be litigated that were previously invalidated.7
`Likewise, Finjan attempts to distinguish the Soverain cases by arguing they involved an
`“instance []of a prior dependent claim being held invalid” before the relevant independent claim
`was held invalid. Opp. at 13. But Finjan offers no reason why this minor distinction matters.
`Indeed, the Federal Circuit focused on the same core facts present here, namely that: (1) there was
`
`7 Purdue does not cite or discuss the controlling precedents in Soverain or Ohio Willow.
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`a final judgment invalidating a patent’s independent claim; and (2) in subsequent litigation, the
`same patentee asserted that independent claim’s dependent claim (not previously challenged or
`found invalid). See Soverain II, 778 F.3d at 1319; Soverain Software LLC v. Newegg Inc.,
`(“Soverain I”), 705 F.3d 1333, 1344 (Fed. Cir. 2013). Finjan also attempts to distinguish the
`Soverain cases by noting those cases included an expert’s concession, but this argument fails for
`the reasons discussed above; namely, that Finjan and its expert have already been heard on the
`issue of the ’305 Patent’s validity during the ’305 Reexamination, and the Patent Office rejected
`that expert’s testimony already.
`
`IV.
`
`CONCLUSION
`For the foregoing reasons, the Court should grant Qualys’s motion for judgment on the
`pleadings.
`
`Dated: November 12, 2020
`
`
`
`Respectfully submitted,
`WILSON SONSINI GOODRICH & ROSATI
`
`By: Christopher D. Mays
`Christopher D. Mays
`
`Counsel for Defendant
`QUALYS INC.
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